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HEALTH Insurance
HEALTH INSURANCE INSIGHTS

Here’s your guide to when and how to buy individual health insurance and how to find health insurance quotes and information.

 Individual Health Insurance Plan

Most Americans get health insurance through their employer. However, individual health insurance is another way to get coverage if you’re not eligible for an employer-sponsored plan or if your company’s plan is too expensive or limited.

These plans let you buy individual health insurance on your own. provide similar benefits as most employer plans. Depending on your income, individuals and families may pay even less for individual health coverage than one through an employer.

You can buy an individual health insurance plan through the Affordable Care Act (ACA) exchanges and outside the exchanges directly through insurance companies. You can’t get denied for an ACA plan. The health law requires that insurance companies cover anyone who applies.

KEY TAKEAWAYS
  • You can buy individual or family coverage from the Affordable Care Act marketplace or directly from a health insurance company.
  • ACA plans qualify for government subsidies that can reduce the cost of health insurance. No other plans qualify for those subsidies.
  • Individual health plans offer comprehensive coverage, including emergency room and doctor visits, maternity care, prescription drug benefits and mental health care.
  • You can enroll in an ACA plan during open enrollment or during a special enrollment period if you face a qualifying event.

How to get individual health insurance?

How can you buy an individual health plan? The health insurance marketplace, run by the U.S. Department of Health and Human Services, is the ACA exchanges website that offers you a menu of your coverage options. The site let’s you compare individual health insurance plans and find the best health insurance to buy for individual.

You simply enter your information, including your income, and the site provides your coverage options, including estimated costs. That’s the place to start when looking for your insurance options.

Not all insurers sell plans through the government-run health insurance marketplace. You can find more individual and family options by shopping directly through health insurance companies that offer plans outside the exchanges. That will take more work to compare the insurers, but you may also find a plan that better fits your needs outside of the exchanges.

Now, let’s take a look at when you can buy individual health insurance and the types of plans and other options.

When to buy an individual health plan

You can purchase or make changes to individual health insurance during the open enrollment period. Open enrollment for most states is from Nov. 1 to Dec. 15 each year. States with their own exchanges usually offer expanded open enrollment.

States with expanded open enrollment include California, Colorado, the District of Columbia, Massachusetts, Minnesota, Nevada, New Jersey and New York.

The only other time you can get individual health insurance coverage is if you have a qualifying event that launches a special enrollment period. These events may have caused you to lose your health insurance coverage. The special enrollment sign up period lasts 60 days.

Special enrollment qualifying events include:

  • Getting married
  • Having a baby, adopting a child or placing a child for adoption or foster care
  • Moving
  • Becoming a U.S. citizen
  • Leaving incarceration
  • Losing other health coverage due to job loss, divorce, COBRA expiration or aging off a parent’s plan
  • Losing eligibility for Medicaid or the Children’s Health Insurance Program (CHIP)
  • Change in income or household status that affects eligibility for premium tax credits or cost-sharing subsidies
  • Gaining status as a member of an Indian tribe

President expands Affordable Care Act special enrollment period

Americans have another chance to sign up for an ACA health insurance marketplace plan in 2021 after President Joe Biden signed an executive order to launch a special enrollment period.

The ACA marketplace special enrollment period is until Aug. 15, 2021, for the 36 states that use the federal ACA marketplace. The other states set their own enrollment periods, but most followed Biden’s lead and expanded the enrollment period.

Biden’s move hopes to insure as many of the 15 million uninsured Americans as possible, including those who lost health coverage because of Covid-19. As of the beginning of May, the special enrollment period reportedly signed up about 500,000 more ACA plan members.

The ACA marketplace’s open enrollment is usually from Nov. 1 to Dec. 15 in most states. That’s the only time someone can get an ACA plan unless they qualify for a special enrollment during other parts of the year.

However, Biden’s executive order means that people without insurance don’t need to qualify for a special enrollment. Instead, anyone who isn't eligible for other coverage, such as through an employer, can sign up for a plan until Aug. 15.

What do individual health plans cover?

Individual health insurance plans offer comprehensive coverage.

Before the ACA, individual health plans’ courage varied widely. Insurance companies could deny applications for insurance or set exorbitant premiums if you had a health condition.

Now, a health insurance company has to cover you regardless of your health history. You qualify for individual health insurance even if you’re pregnant, have a long-term condition like diabetes or a serious illness, such as cancer.

Health insurance plans additionally can’t cap the amount of benefits you receive. They’re further limited on how much out-of-pocket costs you have to pay in a year.

In addition, all individual health plans must cover a standard set of 10 essential health benefits:

  • Outpatient care, including doctor’s visits
  • Emergency room visits
  • Hospitalizations
  • Pregnancy and maternity care
  • Mental health and substance abuse treatment
  • Prescription drugs
  • Services and devices for recovery after an injury or due to a disability or chronic condition
  • Lab tests
  • Preventive services, including health screenings, immunizations and birth control. You pay nothing out of pocket for preventive care when you see health care providers in your plan’s network.
  • Pediatric services, including dental and vision care for kids.

Types of individual health plans

Individual health insurance plans don’t differ in terms of benefits. However, plans vary on costs, how they’re structured, which doctors accept them and which prescription drugs they cover.

Health plans in the ACA marketplace are divided into four metal tiers to make comparing them easier. The tiers are based on the percentage of medical costs the plans pay and the portion you pay out of pocket. Out-of-pocket costs include deductibles, copayments and coinsurance. Find out more about copays and coinsurance.

The percentages are estimates based on the amount of medical care an average person would use in a year.

  • Bronze -- Plan pays 60% of your health care costs. You're responsible for 40%.
  • Silver -- Plan pays 70% of your health care costs. You responsible for 30%.
  • Gold -- Plan pays 80% of your health care costs. You responsible for 20%.
  • Platinum -- Plan pays 90% of your health care costs. You responsible for 10%.

How much does it cost to buy health insurance on your own

Generally, the less you pay out of pocket for the deductible, copays and coinsurance, the more you spend on premiums.

Platinum plans charge harmer premiums than the other three plans, but you won’t pay as much if you need health care services. Bronze, meanwhile, has the lowest premiums but the highest out-of-pocket costs.

When deciding on the level, consider the medical services you used over the past year and what you expect next year. For instance, if you plan on starting a family, consider how much out-of-pocket costs you’ll have to pay if you go with a Bronze plan.

eHealth reported the average monthly premium by metal level:

  • Bronze -- $448
  • Silver -- $483
  • Gold -- $569
  • Platinum -- $732

Bronze and Silver are the most popular plans -- 42% have Bronze plans and 34% have Silver plans. Only 14% have Gold plans and 2% have Platinum plans.

What’s the cheapest health insurance?

The cheapest premiums in the individual market are Bronze plans. Bronze and Silver typically have similar premiums.

It’s a good idea to get health insurance quotes for both Bronze and Silver plans to see the difference. Silver level plans are also eligible for cost-saving subsidies that reduce health insurance costs, which can make a Silver plan even cheaper than a Bronze plan, depending on your income.

If you want the most affordable health insurance premiums, make sure to get quotes for both types of plans.

That said, individual health insurance is often more expensive than employer-sponsored health insurance. Employers usually pay more than half of job-based plan costs, so those plans are often more affordable than an individual health insurance plan.

Individual health insurance subsidies

People who buy an individual health plan through the ACA exchanges may be eligible for subsidies that reduce the cost of premiums.

The ACA allows tax credits and subsidies. Only people with household income below 400% of the federal poverty level are eligible for subsidies.

However, the American Rescue Plan of 2021 included a provision that opens up subsidies and tax credits to everyone with an ACA plan for the next two years. People with an ACA plan will now pay up to 8.5% of their household income on ACA Plan premiums. The Centers for Medicare and Medicaid Services estimates the American Rescue Plan will temporarily save ACA members an average of $50 per person per month and $85 per policy per month.

When you search for a plan through the ACA exchanges, the site provides cost estimates for plans with subsidies in mind.

Reminder: People with an individual health plan outside of the exchanges aren’t eligible for subsidies.

Other options for people looking for health insurance

Individual health insurance is an option, but there are other ways beyond an employer plan for a person to get coverage:

  • Short-term plans -- These plans don’t offer the same benefits as a normal health insurance plan. Insurers aren’t required to provide comprehensive benefits. Most short-term health plans don’t cover maternity, prescription drugs and mental health. Instead, you pay for that care yourself. Short-term plans aren't meant as a long-term health insurance solution. You can only have them for one year and can request two extensions. These plans are low-cost, but they have limited benefits. Also, a handful of states don’t allow short-term plans, while others restrict them to shorter time frames.
  • Medicaid -- Medicaid is available to people who qualify. Thirty-eight states expanded Medicaid, which allows people who make up to 138% of the federal poverty level eligible for Medicaid. That level is $17,609 for a single person, $23,791 for a two-person family and $36,156 for a family of four. Medicaid plan costs depend on your income, but you’ll pay less for Medicaid than an employer or individual plan if you qualify. Medicaid offers comprehensive health insurance despite the lower costs.
  • Catastrophic health plans -- If you’re under 30 or meet income requirements, you could qualify for a catastrophic health plan. These plans offer lower premiums but come with much higher deductibles and out-of-pocket costs than standard health insurance plans. The idea behind catastrophic plans is to give people coverage to prevent financial ruin if they have emergency health care needs. Unlike short-term health plans, which don’t cover many services, catastrophic plans offer the same level of coverage as standard ACA plans.

What to consider when buying individual health insurance

When shopping for an individual health insurance plan, you want to consider your health care needs and budget.

Here are some questions to consider:

How much flexibility do you want in your plan?

When choosing an individual health plan, you want to consider the type of benefit design. Health maintenance organization (HMO) plans are the most common plan design in the individual market. eHealth estimated that 49% of individuals plans are HMOs.

HMOs include restricted provider networks. HMO members can only see doctors and get care from facilities in those networks. Also, you need a primary care provider referral to see a specialist.

Exclusive provider organization (EPO) plans make up one-third of individual market plans. These plans don’t allow you to get care outside of the network, but you also don’t need a referral to see a specialist.

Preferred provider organization (PPO) plans are the most common type of plan in the employer-sponsored health insurance market. Forty-seven percent of employer-sponsored health plan members have a PPO. However, only 16% of individual health insurance plans are PPOs.

PPOs are more flexible. You can see doctors both in your network and outside the network. You don’t have to get referrals to see specialists. However, PPOs have much higher premiums than HMOs, so you pay more for that flexibility.

Find out the differences between HMOs, PPOs and other types of health plans.

Are your providers in network?

Check the health plan's network to make sure it has a good selection of hospitals, doctors and specialists. Look for your providers in the plan’s network.

This is especially true if you get an HMO. HMOs have a restricted network and won’t pay for the care you receive outside of the network.

If you get a PPO, you’ll likely be able to get out-of-network care, but it can come at a higher price tag.

Find out more about the differences between health plans.

What does private health insurance cover?

Check to see if the prescription drugs you take are included in the plan's list of covered medications. Compare other benefits. Some plans may go above and beyond coverage mandated by law.

What are the insurance companies' reputations?

You’ll also want to check out the company’s consumer reviews and financial standing. You can review Insure.com’s Best Health Insurance Companies for customer satisfaction ratings and company A.M. Best Financial Strength Ratings.

Making a smart individual health insurance choice requires time and effort, but the homework you do now will pay off later when you and your family need care.

Frequently asked questions about individual health insurance

Can I buy health insurance on my own?

Yes, individual health insurance plans are available for people who don't have a health insurance plan through their employer.  If they qualify for purchasing individual health insurance coverage, they can buy it on the open marketplace. Be sure to know your income limits and other requirements before you apply.

You may also be able to find an individual or family policy from another source such as an insurer that offers individual policies. As always, make sure you understand the terms of any offer before you sign up for anything.

Can you get private health insurance?

If you do not have an employer-sponsored plan and are not eligible for Medicare or Medicaid, you can purchase insurance policies directly from private companies or through the health insurance marketplace.

What two parties pay for your health insurance if you enroll in an employer-sponsored plan?

Employers are responsible for buying individual health insurance for their employees. They do the research, choose an insurer and determine your plan options. The costs of these plans are shared by both parties, you contribute to your monthly premiums, the amount is deducted from your monthly paycheck, and your employer also pays a portion of it.

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